Good happens!

House and Senate majorities on Monday night passed comprehensive tax reform (SB 30). They restored the three income tax brackets and repealed both the glide path to zero and the LLC income tax loophole. They also began the restoration of income tax deductions that help middle and low income families, including medical expenses, child and dependent care expenses, and property taxes paid.

The debate and bill passage were not easy. Some legislators are dug firmly into the position that all taxes and all government services are bad – one Senator even suggested that if you need a service like education, then you should pay for it yourself. But in the end, a majority in both the House and Senate voted to support tax reform. Unfortunately, those majorities were not strong enough to support an effort to override a veto. They fell one vote short in the Senate and 15 in the House.

Governor Brownback did not take long to announce that he would veto the plan because, in his world, his tax experiment is working. Despite all evidence to the contrary, he truly believe his experiment is working.

He vetoed the bill on Tuesday and that night, the Senate took up a motion by Senate Vice President Jeff Longbine (R-Emporia) to override the veto and pass the bill. A roll call vote in the Senate is conducted by calling each Senator’s name and they respond Aye or No. It was the last Senator called who put the bill over the top on the override. Senator Rick Wilborn (R-McPherson), who had voted No on Monday night, voted Yes on the override assuring that it passed.

The veto message then went to the House, where Tax Committee Chairman Steven Johnson (R-Assaria) made the motion to override the veto.

Again, the debate focused mostly around the idea that Kansas “has a spending problem, not a revenue problem,” despite the fact that revenues continue to decline and we have had multiple rounds of budget cuts since 2012.

Moving the House to override was a much bigger task than in the Senate since we had to find 15 members willing to override in addition to the 69 who voted for the bill initially. In the House, roll call votes are done when legislators press a red (for no) or green (for yes) button on their desks. Their names light up in red or green on the vote board. The initial vote came up with 84 Yes votes – just enough to override. Some legislators explained their votes and then four more moved to the Yes column. The final House vote was 88 yes to 31 no.

This action puts tax reform to rest for the session. But there is still more to be accomplished.

School Finance Passed But Will It Be Vetoed?

The school finance plan has passed, as we reported yesterday, and is sitting on the Governor’s desk awaiting his decision. So far, Brownback has not given any indication as to whether or not he will sign the bill and let it be sent on to the Supreme Court for review.

While KNEA does not believe the bill will meet constitutional muster, it is important that action be taken on it as quickly as possible. If he intends to veto it, he needs to do it now so the legislature can either override the veto or get to work immediately on an alternative. If he intends to sign it, it should be done now to give the Supreme Court time to review the bill and hear arguments on its pros and cons.

Hopefully a decision will be made soon. Perhaps even before you read this!

What makes us think this bill (SB 19) will not satisfy the Court? Primarily, we believe it will not meet adequacy of overall funding. While most of the policy forms a solid finance formula, the funding amount is far below what the State Board has indicated is needed and will certainly not be adequate in the eyes of the plaintiffs.

Additionally, there are legitimate concerns about how some provisions will impact required equalization. Last year, the Court sent the legislature back to fix equalization issues. This year, some are questioning new provisions regarding the false base for LOB which, under the bill, grows with the CPI-U and a provision on expanded spending authority under capital outlay. The Court may agree that these provisions are disequalizing and reject them. It is unclear whether the Court could separate them from the whole bill or not.

Longest Session Ever?

Well, not yet. The longest Kansas Legislative Session ever was the 2015 session, which lasted 114 days. Today is day 110 for the 2017 session so we’re pushing it now.

We believe it will be over before breaking the record, but it really depends on how the Governor deals with that school finance bill. If it’s vetoed, we could very well move beyond 114.